The global food shortage is so severe that the EU wants to connect a Russian bank sanctioned to the global financial systems to keep grain supplies moving

• The EU wants to reconnect an sanctioned Russian Bank to the global financial systems.

• The bloc wants to convince Putin to extend the Black Sea Grain Deal, which is about to expire.

• The agreement allowed Ukraine to export its food products amid a Russian blockade.

The global supply crisis is so severe that the EU wants a Russian bank sanctioned to be reconnected to the global financial network — a connection broken when Russia invaded Ukraine in 2014.

The concession is to allow the Russian Agricultural Bank, a state-owned bank, to handle payments relating to grain exports.

According to the Financial Times, under the proposal, initiated by Moscow, and mediated by the United Nations, a new branch of the bank will be permitted to use SWIFT – the global messaging system – which was previously banned for some Russian Banks following their invasion of Ukraine.

Two sources told The FT that the proposal to allow the Russian bank to access the global financial systems is the “least worst option” for securing Russian President Vladimir Putin’s support for a extension of the Black Sea grain agreement, which expires this July 18.

In July 2022, Ukraine struck a grain deal – that allowed the export of food and fertiliser from three important Ukrainian ports.

Ukrainian grain exports were previously stuck in the ports of Ukraine, as Russia blocked certain important Black Sea shipping routes.

The international community is facing difficulties over sanctions against Moscow. This proposal to allow the Russian Agricultural Bank to rejoin the SWIFT network highlights the difficulty.

The announcement of the possible concession came as Gennady Gattilov, Russia’s ambassador to the United Nations told the pro Kremlin Izvestia paper that there was no reason to continue the “status-quo” in the Black Sea grain agreement.

According to the report published on Monday, Gatilov stated that re-connecting the Russian Agricultural Bank to Swift is one of the conditions to extend the agreement.

Gatilov, according to a Reuters translated report, said that Russia has extended the agreement in the hopes of positive changes. “However, the situation we see now does not allow us to accept the status quo.”

Russia is a large exporter of commodities ranging from farm products to energy. The supply chain is in turmoil since the COVID-19 outbreak began in 2020. This has been exacerbated by the conflict between Russia and Ukraine. Both are major wheat-exporters.

The UN Food and Agriculture Organization Food Price Index, which tracks a basket commonly traded commodities, reached a record-high of 159.7 by March 2022. However the index fell back to 124.3 by May 2023.

Insider’s requests for comments to the European Commission and Russian Agricultural Bank were not immediately responded to.

Original article available on Business Insider